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Single-family Home Builder Confidence Increases in July

Builder confidence in the new, single-family homes market rose four points in July to a reading of 53 on the National Association of Home Builders/Wells Fargo Housing Market Index released July 16. Any reading over 50 indicates that more builders view sales conditions as good than poor.

The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”

All three HMI components posted gains in July, NAHB reports. The index gauging current sales conditions increased four points to 57, while the index measuring expectations for future sales rose six points to 64 and the index gauging traffic of prospective buyers increased three points to 39.

“This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace,” says Kevin Kelly, NAHB chairman.

The HMI three-month moving average was up in all four regions, with the Northeast and Midwest posting a one-point and two-point gain to 35 and 48, respectively. The West registered a five-point gain to 52 while the South rose two points to 51.